Have you considered utilising your car park as a revenue generator?
Across a range of sectors, the optimisation of car parks in order to increase profit is often an untapped source. Though there’s more to managing a car park than simply filling up spaces, those involved with their smooth running must ensure they’re doing their utmost to open up revenue streams and maximise the potential for profit along the way.
There are many ways managers can optimise car parks to reduce costs and increase revenues, from sensor lighting and automated number plate recognition, to subcontracting spaces for weekends and large events. So, if you’re looking to increase profits, we’ll identify ways to reorganise your car park, physically and operationally, as well as tips for filling capacity, gaining optimum revenue for your spaces and driving down overheads.
A brief word on creating demand
To really increase the profitability of a car park, it is important to view every parking space as a commodity which is rented out by different users – via seasonal permits, onsite payments or online bookings. To ensure maximum profitability, it’s vital that these commodities are filled as much as possible. This requires a little out-of-the-box thinking: to capture different users, increase their length of stay and provide extra services at a cost.
Mark Anfield, Operations Director at ParkingEye, explains the opportunity:
“Day-to-day, car park management can feel like a hassle to internal teams. We work with clients who are, or rather were, wholly stuck in the trenches – fixing barriers, dealing with complaints and generally trying to keep on top of operations. This often distracts internal stakeholders from the bigger picture, and opportunity as they focus on the symptoms whereas investigating the true source can often be the answer – we help people see that and build a plan to transform the site, from simple reorganisation, so they can fit more spaces into their site or allocate specific areas to different groups more effectively through clearer signage. This process often leads to a more accurate picture of capacity throughout the day and how different people are using the site.”
If the site is being abused, this will impact customer parking and therefore footfall/revenue from genuine customers. Tackling this abuse is key to ensure that your site is as full as possible with customers looking to spend money with you. Space over and above that can be made available to nearby motorists looking for parking spaces, driving up margin-rich revenue. Either way, it’s win/win.
The first step is to generate car parking demand, by identifying different users who could benefit from your car park.
At times, it can be hard to predict car park demand, since it fluctuates a lot depending on the time of day, day of the week and season of the year. The erratic demand, as well as customers’ varying lengths of stay, mean it can be difficult to price optimally. This may mean that you’re required to create a more flexible approach to car parking supply – adding incentives when demand is low, and guaranteeing maximum profit when demand is high.
Many practices to increase parking revenue come at a low cost, so the extra cash generated by modern car park practices will go straight to the bottom line. Clever installations such as ANPR can capture data and information to help you understand your car park’s peak times and areas for improvement – so you can better optimise your service. Couple this with automated payments, and you have a much more streamlined customer experience.
Combining a demand and length-of-stay pricing model with a more varied product mix can maximise revenues by stimulating demand, capturing this need at the right price and by improving how the available capacity is used. For example, dynamic pricing (also known as congestion pricing) is increasing in popularity. As your car park fills up, the hourly or daily rate increases. As more spaces become available, the price goes down in order to draw customers in.
Legally, you are required to inform car park users of the main terms before they drive into your facility such as maximum length of stay and that charges apply on the site. Be sure to use a variable messages sign at the entrance that can be easily updated to ensure accuracy.
In determining your own car park’s rates, you’ll likely have done your own research, looking into the rates and capacities of competing car parks and how much drivers are willing to pay. Since rates can be unpredictable, if you don’t heed your own research and monitor what’s going on, you run the risk of falling behind when it comes to competition.
For instance, your car park might well be full on a daily basis. While that sounds like good news, it could also be an indication that your rates are too low, and your customers are heading there because you’re the cheapest option. Thus, you might need to increase both your rates and look at additional avenues for increasing revenue in the process.
Alternatively, your car park may be full due to non-genuine customers, staff or visitors. Unauthorised users may be preventing primary users from parking close to your premises. This could lead to complaints from your target users, and even a loss of revenue if your business is reliant on customers parking close to your premises.
Conversely, if your space is looking on the empty side, your rates might be too high and lowering them could well attract new business activity and revenues. The focus either way is on maximising revenue through more parkers at a lower cost or making yourself more competitive with higher rates.
If those using your car park feel safe and secure, then they are more likely to use it again in the future. Thus, improved car park lighting can have a direct effect on revenues, and provides an alternative to traditional methods, which often create areas of foreboding shadow that could spell danger to some customers. Conversely, a well-lit car park creates a safer environment for visitors and fewer accidents.
In addition to the heightened sense of comfort, certain kinds of lighting provide clear, simple signage to available spaces, directing traffic flow in a smoother, more streamlined manner. Additionally, they can be configured into special status bays, including disabled spaces, while motion-dependent lighting also significantly increases levels of energy efficiency which helps to reduce costs in the process, whilst maintaining safety and security on the site. In turn, this improved experience theoretically should equate to returning customers and recommendation through word of mouth.
Automatic number plate recognition
Reliable, accurate and cost-effective, automatic number plate recognition (ANPR) ensures greater compliance and increased parking revenue. Broadly speaking, ANPR technology captures the movement of all vehicles entering and exiting your car park and communicates this information to a central control system. This system then continuously processes the information against defined parameters for a facility 24 hours a day – giving information about traffic flow from hour-to-hour, day-to-day and month-to-month.
This effectively means 24/7 management, automated processes to reduce day-to-day hassle and an increase in security – all of which translates to a reduction in spend and a greater revenue as a result.
Furthermore, ANPR provides access to big-data – giving you insight into important information about the parking habits of the drivers using your site(s). This information can be effectively utilised to provide insight into motorist behaviour, so you’ll have more information about infrastructure requirements and any opportunities to increase revenue.
Online reservation systems
If there are certain times in the day where you have trouble filling up spots, then a system which allows customers to reserve spaces online could be helpful. Drivers don’t want to cruise around looking for empty spaces, so it ensures they can view your car park’s available spots and reserve one ahead of time, helping to attract customers that might not have been attained otherwise. You’d be surprised by how many customers are willing to pay a premium just to secure a parking spot. With 29% of motorists having admitted to abandoning journeys due to insufficient parking, your car park can be a hugely sought-after commodity.
Get to know your markets
It’s not just working hours in which your revenue has the opportunity to thrive. If you’re based in a city, then you can use the popular restaurants, hotels and other places of interest to your advantage. Talk with the owners of surrounding businesses to see if they would like to partner with you as a parking option. If they’re interested then there’s plenty of opportunities to offer incentives, such as discounts on parking for larger groups.
If it’s a hotel you’re working with, then it might be worth forming a valet partnership with them that allows their guests to secure a certain area within your garage for valet parking. The hotel will pay you for the space and increase awareness of your garage, whether previous guests of the hotel are staying there again or not.
Furthermore, for businesses with short, set operating hours (restaurants which only open in the evening, for example) it may be possible to offer up your parking spaces for other users. So, even if you arrive at your business to see your car park empty, it may have been full during the day without your knowledge full of earning potential. Shoppers or commuters could maybe use your site between 7am and 6pm, to further increase revenue straight to your bottom line.
Looking to secure more loyal customers? Why not invest in parking amenities such as free car charging areas or vacuums? If they can use a vacuum or charge their car as part of their ticket fee or charge, they’re certain to choose your car park over others.
Subcontract on weekends and during large events
If your car park is specifically contracted to provide space for offices, then consider subcontracting it out during weekends when it won’t be used by office workers. Similarly, if large events in your area such as fairs, live performances, football matches or other sporting events are scheduled to happen, then it would be wise to capitalise on the potential footfall by subcontracting your car park.
Provide loyalty schemes
Rewarding returning customers with benefits, privileges and incentives is a great way to secure their custom. Creating a perk where frequent users garner points that can translate into parking discounts or additional benefits like parking spaces closer to entry points, car washes or a valet service can be of great benefit to them and you. What’s more, these kinds of applications are readily available and can often be easily integrated into your existing car parking system.
Looking to improve your car park management with quality solutions and innovations? Head over to the ParkingEye homepage for more information on optimal car park performance and get in touch with us today.